Monday, March 31, 2008

The recent near meltdown of the American economy & the demise of a few financial institutions has put the spotlight on Wall Street analysts. Many are questioning their credibility. And it is not baseless.

Bear Sterns, a casualty of the sub-prime crisis, earned a ‘buy’ rating until barely a few weeks before it went belly up. Something similar was the case with quite a few companies that crashed, but the analysts on the Wall Street failed at them too, in the process losing a lot of money for a lot of small investors.

The big investors aren’t hurt much; they have hedged their investments sufficiently & have diverse portfolios, besides having access to a lot of inside information. But it’s the small investors that lose a lot of money in a downturn. Often these are ordinary folks with day jobs & trying to make an investment for a profit so they can see their savings swell (sooner than other means of savings). They do not have sufficient funds to invest freely; they often have to sell other stocks to buy good stocks, in the process losing out on stocks they ought to have held on to longer. Money poured in by the small players is their own savings or borrowings from friends & family.

Many times analysis means nothing. Case in point being Blackstone. Last year, this company was turning healthy profits every quarter, yet the share price kept sliding down. How can a company doing well see it’s share price drop? The reason is the big investors. In collusion, they drive the share price down, when it goes down sufficiently enough, the start buying copious amount of shares driving up value, in the process killing all the small players. The smaller ones are usually driven by financial news, quarterly reports, analyst guidance & their own research. They do not have access to information & people that the big folks have, hence are at a disadvantage.

CEOs are equally guilty of not communicating the truth to their stakeholders. The Bear Sterns CEO publicly claimed there was nothing wrong with the company. Yet, barely a week later we heard news of it’s sale. Was it because of his ignorance of the situation inside, or was it pressure from Wall Street, we may not know. The CEOs have to heed to Wall Street, it being their biggest source of funds. The pressures of making profits quarter over quarter are high & companies are judged on this basis. This drives the companies to seek ‘innovative’ ways of making money, every quarter. New plans & strategies are devised to keep the investors on Wall Street happy & they can sometimes lead to bad decisions in the long run. Business is governed by Wall Street. This was evident during the early 2000’s when many corporations went bankrupt yet hid that fact by innovative accounting & the current situation in the US.

How effective are the analysts on Wall Street anyway? Most of the times, they are driven by making a quick profit. Contrast that with revered investors like Warren Buffet. When asked what his style of investing was, how he was different from Wall Street, his reply was simple. Buffet believes in long term. If he sees value in a company or a sector, he invests in it & sticks with it. He has patience, which is severely lacking in Wall Street.

It’s hard to believe nobody saw the sub-prime meltdown coming. There were smart fellows shouting their lungs out, but they lost. I guess Goldman Sachs & Lehman Brothers were among the smart ones. Unfortunately, they were a minority.

Thursday, March 27, 2008

Especially when it’s the government. The UPA has kissed fiscal responsibility good-bye as evident from it’s populist schemes. Government spending is one of the biggest burden on the treasury (and the taxpayer ultimately), yet more & more is doled out each year.

Now that the FM has elaborated that the farm loan waiver will have phases, it is clear that the burden will be on the subsequent government (guess Congress does not fancy it’s chances in the next election). That’s a lot for the next government to worry about, an added distraction to balance the finances when it ought to have money for India’s progress (roads, power etc). Add to that the further burden of the sixth pay commission. Wait, there’s more, NREGS, oil bonds, fertilizer bonds, religious subsidies, Sachar recommendations. There’s just do end to government spending. Where will all the money come from? More taxes & more borrowing.

60 years of independent India’s history would be enough to learn any lesson, but the government just doesn’t get it. All the socialist measures meant for the welfare of the people have not yielded any results. We still continue to figure on those lists, poor countries, the malnutrition, the illiterate, the infant mortality, the female foeticide & all such. Yet our governments continue pouring more money into failed schemes. Maybe our leaders do realize this, but they just do not want to admit failure. That isn’t exactly responsible behavior.

Clearly the leaders have failed in providing a better environment for us. A lot of time & money has been laid waste. It’s time for the leaders to stay away from all those areas they failed in & let the private sector help them. No point in wasting more money. The government should tend to only matters of national & strategic importance & let the private companies do the all the work to provide a better life for the people. This will save some time for the governments to concentrate on the national interest than on vote banks. Moreover, there no longer will be any need to have all those sundry ministries, reducing the number of ministers & government spending.

If our leaders are serious about the progress of our nation, they should realize their failures, admit them & be prepared to hand over responsibility to those who can carry them out efficiently. They have a responsibility towards the nation.

Wednesday, March 26, 2008

Hinduism is attacked everyday. Some videos on youtube & some blogs are actively trying to malign Hinduism. Hindu Gods & customs are often made fun of. I wonder why? Do they think Gods & customs in other religions can’t be funny? But that is not the point.

Hinduism has given so much to the world. Contributions range in a variety of fields like science, mathematics, astronomy, medicine, health, arts, literature etc. The contributions are numerous. Far too many than any other religion. Even the fact that the world is round can be seen from the carvings on some of the oldest Hindu temples. It is also the most tolerant & liberal of all religions encouraging asking questions. It also encourages self realization. Some of the other popular religions viz. Christianity & Islam ask you to follow their holy books & discourage questioning it. So which one is better then?

But when you read the criticism or watch the videos criticizing Hinduism you realize that, they arise from either ignorance or deliberate intent to show it in bad light. Where these criticisms fail is not realizing the shortcomings in their own religions. As a matter of fact, Hinduism has been in existence for well over 5000 years now & is still thriving, despite all the hatred against it. Even the religious heads of Christianity & Islam shun those who criticize it calling them either a satan or the enemy of their faith. If you believe you faith is superior, then why this insecurity? Why be so defensive? Hinduism has never sought to actively convert people. We know for a fact the Christianity & Islam actively seek this. This is evident from all the conversions happening in India. The missionaries that are involved in conversions often use social work as guise. If you genuinely believe in the betterment of society, why seek to convert? Why not just do your good work? Isn’t this preached in Hinduism? Just do good work & expect nothing in return?

We all know that the various Hindu religious centers & groups are greatly involved in social betterment. The examples are numerous to cite, some prominent ones are Bhagwan Satya Sai Baba, Sri Sri Ravi Shankar just to name two examples. They have been involved in the social betterment without any hidden agenda (conversions or criticizing other religions). So why the hatred towards Hindus? We all know that people of various religions were (& are) allowed to practice their faith in India, even during the time of Kings. How else do you explain the flourishing of all religions in India? Isn’t this an example of being an open, welcoming & tolerant society where the majority is Hindus? Contrast this with Islamic countries & you’ll see the difference. Even in the USA you’ll come across missionaries encouraging you to adopt Christ.

The RSS is often vilified & is called a terrorist group. It is also said to be the Hindu equivalent of Jehadi groups. What is the proof to this claim? Do they seek conversion? Do they build bombs? Do they carry out suicide bombings? Do they run fundamentalist religious schools (like madrasas)? Do they kill people for not being Hindus? On the contrary, it’s contributions to the nation have been immense & to everyone, regardless of one’s religion. It is the first group to send help during any calamity, natural or otherwise, it has helped countless Hindus, Muslims & Sikhs during the partition, the volunteers put their lives at grave risk in doing so. Why are all these contributions overlooked? What’s wrong when it asks people to love their country?

Even the ancient Indian epics, Ramayana & Mahabharata are discredited as mythologies. How exactly are these myths? These were written by sages of the time & are an account of life & times of the characters in these epics. Is it not mischievous to call them mythologies when the Ten Commandments or the Bible or the Koran are accepted as facts? And in the case of Koran, followers of Islam claim it was handed over by Allah himself. Nobody seems to refute these claims, but conveniently discredit Indian epics.

It’d be better if people did not criticize any religion without understanding it. The Hindu bashers would themselves a favor by trying to understand Hinduism first & then comment on it.

Friday, March 21, 2008

I’m sure many expats from India will agree to this. The Indian consulates & missions are a reflection of the inefficient government offices in India. Babus will be babus. The same indifferent attitude, lack of professionalism & general carelessness is on display all throughout the world.

One of my friends in the US had to get his passport renewed. This, according to the consulate in NY, is a simple 2-3 business day’s affair if all the paper work is in order. That claim not withstanding, it took 5 weeks to get a new passport for himself. There was no system of tracking the progress at all. Worse yet, you can’t even get a hold of any person to talk to. Sure, they do have a phone number, but when you call there, you have recorded voices directing you to choose appropriate options. When you do choose the right option, a recorded voice tells you to not call them before its 4 weeks & even if it’s an emergency you should leave a voice message! No person to talk to. This seems to have changed recently. Another of my friends tells me, he could talk to a person, but there’s a catch here. You can only talk to a person between 02:00 to 04:00 pm on working days. And you have to be lucky.

In a different incident, relatives of another of my friends were visiting the US. Unfortunately they lost their passports while on a trip. The next thing they naturally did was to get in touch of the Indian consulate & the nearest one was in NY. On telling the babus of what had happened to them, they got the most absurd answers back. The babu there told them, they had to go back to India & follow the necessary process since their original passports were issues there! How could one travel back to their home country without their passports & visas?

The people working at our consulates seem to be the same babus imported from back home. It is quite clear from their attitude towards work & their English. When you call the NY consulate, you’ll be greeted with a voice telling you about the consulate & the recent outsourcing of it’s visa processing to a firm called travisa. The voice & accent are undeniably Indian. There’s nothing wrong with that, it’s a good thing, but it is fast & hard to understand. It would save a lot of trouble if they had someone who could speak clearly & it doesn’t have to be a non-Indian.

With such unprofessional attitude is it surprising then that some Indians overseas are upset with the lack of support they get abroad?

Thursday, March 20, 2008

Read this. Sukhpreet Kaur is the real daughter of the nation. Our leaders can certainly take a cue from her. If this doesn’t make Manmohan & Sonia feel guilty for constantly undermining India’s national interest, then nothing will. Nation is above everything else. Sadly, today’s ‘intellectuals’ in our country would have you believe the opposite is true.

This blog salutes (as have many other blogs) the brave & true patriot Mrs. Sukhpreet Kaur.

Friday, March 14, 2008

Sure, the Congress would like you to believe so. And hence all these reservation quotas, entitlements & the like. If poverty & backwardness could be solved by this, then 60 years of such entitlements would have shown results. Sadly they haven’t. And our politicians have failed to learn this lesson.

Mere reservations, entitlements & free dole aren’t going to help. These will only cripple the backward / minority classes more making them dependent on such political largesse. Such entitlements will not make them competitive in this world. This is the lesson to be learnt from the past 60 years. What would be better is focus on providing quality education to all which would raise competitiveness of folks allowing them to lead a better life.

All this caste politics has not helped us one bit. We were supposed to live in unison. The situation today is quite the contrary. Shunning casteism & focusing on merits & betterment of all, irrespective of their religion or caste will create a better environment for all to thrive. But our leaders have lacked this foresight & continue to do so; evident from what the UPA has been doing in the past 4 years.

Failed schemes tend to get more funding in the hope that more money will better the situation. The result, more money lost. Ill conceived ideas meet the same fate. Reservations are increased every election year, hoping it will benefit the backwards. When, the same has not helped one bit in 60 years. Entitlements are increased, resulting in the beneficiaries only becoming dependent on this. Quotas in government agencies are increased, resulting in bringing down the efficiency & draining more money.

If the politicians really intended to help the poor or the backwards, they’d put more thought, spend more time on the ground understanding the reality. Not appoint commissions who sit in their offices & type up reports & recommendations on what they think would help. The fact that our leaders have time & again failed to realize this is reflective of their leadership intelligence. They are not alone, the minorities too haven't realized this. The only way to climb up the social ladder is to stop whining & start doing hard work, seek education, get jobs, be self dependent, contribute to society, nation & generally harbor ambitions of improving your community, not seek freebies.

Wednesday, March 12, 2008

We often say Indian society is better. What is the basis? Our culture, our customs, our values, our respect for matrimonial alliance, our diversity etc. are the usual suspects. All of which are true. We do have a unique culture, which is the oldest. However, this is often said in ignorance.

Anyone who has spent a few years in one of the western societies (especially the US, since a lot of Indians go there) will have witnessed it. The very first thing an Indian might observe is the number of women at workplaces. There definitely are a greater number of women working in western societies. Moreover, a lot of them are in influential positions. The gender equality & freedom is greater in comparison.

Another common observation may be the respect for all kinds of work. Work isn’t assigned based on caste. Every working being is respected. Indians tend to think lowly of their domestic help or of people from lower castes. That isn’t the case in western societies. Everybody is treated with dignity.

One of the reasons why western societies function better is discipline. One can see greater discipline followed, be it at a bus stop, train stations, on the road, public places etc. A greater respect of rules & law, strict enforcement, respect for human life, respect for the disabled, senior citizens, and people from all races, ensures a smooth running society.

However, what’s even better about the western societies is the respect for women. All women are treated with equal respect in a relationship or at work. A woman is treated as an individual with her own opinions. She has the freedom to choose her life partner & power to walk out on a relationship. She can do everything a man can. A divorcee will not have a tough time seeking a partner gain. The society is open enough to accept divorcees or even a widow. A widow in India is considered a jinx.

If a woman were to be raped (God forbid), she isn’t shunned by society. Instead she can still lead a normal life & be equally accepted. Finding a boyfriend or getting married or a job or starting a business isn’t tough. This to me is an indicative of mature society. This is part of the reason why the west has progressed greater in all respects.

While our culture is definitely something to be proud of, as a society, we still have some growing up to do. Sadly this realization eludes most of our poeple & leaders. They seem to be stuck with petty issues concerning caste, religion, votes. If we have to be among the best nations in the world, we have to rise above our pettiness.

Being the UPA supremo, she's very much at blame for all that UPA has done. She had this to say -

"In recent weeks, there have been violent manifestations of bigoted provincialism, deliberately engineered for narrow political gains,"Sonia shunning 'narrow political gains' is a pretense. Her chairmanship of UPA is marked by the same thing she shuns. How different is minority (muslim) appeasement, extending pilgrimage subsidies to Christians (in AP), reservations, poor economics, lax attitude on terror & internal security etc. different from 'narrow political gains'?

She adds -

"We live and work in a democracy that is governed by a great Constitution and the rule of law,"

If Sonia believed in democracy & the Indian constitution, she would have respected that & nottried to subvert it everytime as the links show has happened in Meghalaya, Jharkhand, Goa & Karnataka.

And she didn't fail to criticize the BJP. She had this to say -

Sonia said that this prejudice translates into violence not just against migrant labour, but also against minorities in states ruled by the Bharatiya Janata Party and some of its National Democratci Alliance allies like the Biju Janata Dal.She doesn't fail to blame the BJP & the NDA at every chance she gets. Putting the blame on the BJP & the NDA allows her to escape from answering on her own failures. The UPA is power & hence is answerable to the nation. Don't shift blame.

The selling point used by the missionaries is that Christianity is better. Jesus loves all. But how exactly is it better when they still have caste wars within. Read this (via Sandeep).

Were there supposed to be 'Dalit' Christians & 'Upper-class' Christians? Forgive my ignorance. If this continues post conversion, how is Christianity different than the Indic religions? The missionaries have targeted these very caste differences to sell their faith. If squabbles continue, it isn't much different, is it?

Monday, March 10, 2008

A great many number of researches suggest that India is amongst the most corrupt of countries. Ask any Indian & he’ll attest to it. Most of us have even witnessed it first hand.

But is India really the worst corrupt? There’s no denying that there’s a lot of corruption at all levels here, but other countries are no better off. Especially the developed nations. They just have a fancy name for that. While it’s impossible to bribe a policeman to evade a speeding ticket, it is quite possible to find favor with a politician. Lobbying is a huge industry in the US & millions of dollars are exchanged.

Political candidates need millions of dollars to run their campaigns. One of their major sources of funds is lobbyists. Corporate houses are typically behind such a thing. This allows them to find favor when the candidate they back is elected.

There are quite a few powerful lobbyists on Capitol Hill. Their role has come under scrutiny recently. These lobbyists will lobby the congress for their client’s advantage. Often contributions are indirect, thus one can’t call this corruption.

A certain spending provision to politicians with access to government funds has come under the scanner in the US. These are called earmarks, which allow a politician to provide for spending for a named project without prior approval, bids or scrutiny. This is a huge source for special interest groups.

I’m not suggesting that corruption is OK because it exists all over the world. But let’s just not ignore what happens in the nations like US. However, what’s different, at least in the US, is that once exposed, the public & the media go after the politician & the due course of justice if followed. The politician can then pretty much forget about his career. What happens in India? Tainted leaders continue to be in power, the media is hand-in-glove with them & the public memory is short. Life goes on.

Friday, March 7, 2008

Everytime they are presented with historical facts inconvenient to them, the guardians of Islam immediately discredit it, refuse to accept it & play the minority card. Something like this occurred in Chennai this time.

Francois Gautier was holding an exhibition named 'Aurangzeb as he was according to Mughal records'. His organisation FACT has been doing remarkable work in bringing out facts about India & the oppression against Hindus. Now mind you, this exhibition was held on sound facts. Aurangazeb's own court records were used which show the means followed by him to propagate his faith. The records are an amazing account of him destroying Hindu temples, not repairing the damaged ones, discouraging fellow Muslims from taking interest in Hindus or Hinduism & the 'I kill if you don't agree' principle followed by him. But these facts were too inconvenient to be faced with. This exhibit, showing their Islamic forefathers in bad light, was unacceptable & they demanded it's closure. This closure was lead by local Muslim leaders of 'Makkal Urimai Kalazam' & the Nawab of Arkat. They feared this would disrupt communal harmony. Nice reason to force the police into action & cover up the facts.

Arguments from FACT suggesting that only historical records were used & not personal opinions, didn't placate the Muslim leaders. What's worse, the Chennai police arrested the exhibit organisers, when the Muslim leaders started the protest. Those exhibitors were only presenting the facts. Amazing, isn't it? It doesn't end there, the police have locked up the exhibition indefinitely & the organisers have no idea when will it be handed back. They do not have access to it. This puts important artifacts collected by FACT in jeopardy.

This is not the only occasion where Muslims have ignored facts about their history, it's been happening all along. Read this irrefutable article by Arun Shourie to know one more such occasion. Now where are all those freedom of expression crusaders? Should it be selective? Is it fair to suppress history? What's wrong with presenting the truth?

Wednesday, March 5, 2008

The Indian Railways are making money. Thanks to Laloo(?). There have been suggestions on other blogs that letting executives in the railways do their work has resulted in the turn around. Perhaps Laloo did just that, stayed away without meddling much.

But, there have been some very interesting changes, not discussed in the media that may have resulted in increased revenues. I came across these on various other blogs, but I do not have all the links now.

The railways introduced a ‘cut’ when canceling waitlisted tickets. What was the rationale behind this, I do not know, but it has allowed the railways to collect more money that way. This helps apart from overloading the coaches with the waitlisted passengers traveling sleeping on the floors or standing by the doors. Besides, short distance travelers often buy a general coach ticket & travel in sleeper class (‘kindly adjust’, is their request).

The number of tatkal berths, per coach, have been increased. They now account for a third of the number of berths in a coach. And you have to pay fare for the journey of the train, not your destinations. This definitely is a big increase in revenue.

Increase in freight charge allows for more inflow of money. Road transport costs are increasing & the railways are a good alternative.

And let’s not forget, Indian Railways is a monopoly, so we haven’t much choice, but to pay the prescribed fare, whatever it is. However, passenger fares have been reduced. Amidst all these changes, what has not changed is the quality of coaches & stations. This continues to be the same. All the latest efforts to bring technology to railways are appreciable, but, safe, clean & peaceful journey should be the priority. If you are traveling by sleeper class, there’s just no escape from the various hawkers, eunuchs, beggers, shoe polishers, tea/coffee vendors, magazine sellers etc. Peaceful, undisturbed journey is impossible.

It is indeed appreciable that the railways have become profitable putting less burden on the govt. treasury. But, some blogs suggest looking at accounting practices followed in reporting the rail revenues. Let the passenger decide if the railways have improved.

Monday, March 3, 2008

Sonia hailed the loan waiver to farmers as revolutionary. Well, why wouldn’t she, it’s not her money. This largesse, at the cost of our tax money, is aimed at getting enough votes to stay in power. But, like you may have read elsewhere, this is simply not the solution. And curiously enough, Sonia addressed a large gathering of farmers soon after the budget was announced. How did the farmers manage to get there so fast? Wasn’t possible without leaking the budget & getting them gathered outside 10 Janpath. Staged, anyone?

Let’s see where the problem lies. There is a very simple fact, in order to be well off, you have to earn more than you owe. Only then will you see some savings in your bank. Our poor farmer’s plight has something to do with that. They are trapped into a vicious cycle of debt. They borrow money to cultivate their lands, but their yield does not give them enough money, as a result, they do not make enough to pay off their loan. Not to forget, there’s no saving for them in the end. They are left with borrowing more money to survive.

First they seek loans from banks. On failing to pay off their debt there, they are no longer favored for further loans. That leaves them at the mercy of local money lenders, who lend at a much higher interest. Many of these lenders aren’t even registered. This cycle continues until, the hapless farmer learns, the only way to end this is to stop existing anymore. In view of this problem, the loan waiver isn’t going to help the farmers at all. It’ll be a short term relief at the best. The loan waiver is a bad example & will make it difficult for future governments. It will lead the farmers to believe it's ok to default, the government will take care of you.

Now, let’s look at the fine print. The waiver will only benefit farmers with land measuring two hector or less. That leaves most of the farmers in Vidarbha out of this. This was the area that caused the PM to pay a visit & announce a relief package owing to the farmer suicides. Besides, what happens to those who owe to the private money lenders, what plans do we have for them? Of course, the government can’t help those who follow illegal means, but the problem is deep.

There’s no denying that our farmers do need help. What they really need is a plan to make them competitive & provide sustainable growth. They need good price for their produce so they can pay off their loans & make some money for themselves. This crisis in the agriculture sector has been pointed out numerous times, but has failed to catch attention of our leaders. Our FM is happy with the record tax collections & our agriculture minister is busy with his BCCI duties (when he gets paid from our tax money for his duties as a minister).

While the FM has decided to write off the loans, what this will do the balance sheets of banks is another matter. Writing off debts isn’t going to do them any good. Besides, the consequences could be grave, if the recent sub-prime crisis in the US is any indication.

Rs. 60,000 crore is a large sum to write off. The waiver has set us back by that much. It’ll be interesting to see what will this do to the deficit & how does the FM plan to raise that much money. The answer may be this, raising or levying other taxes & burdening us more. And he has done exactly that. Also, do not forget the sixth pay commission.

By increasing the income tax slab, the FM has provided relief to tax payers. However, other taxes have gone up. Capital gains tax increase is penalizing those who turn in a profit. This may lead to them seeking ways to avoid tax, like most of the small businesses do.

The budget wasn’t short on populism. Allocation for minority welfare was doubled, with plans to increase the number of banks in minority dominated areas. Now here’s another possible loan waiver in the making (just speculating). The most baffling announcement was more folks from the minority will be recruited in the Central Para-Military forces. This doesn’t fall under Chidambaram, does it? Well, with the elections coming up, all this makes sense.

The union budget is borrow & spend that doesn’t bode us good. Will it maintain our growth?